Bike-share firms don’t need regulation

One year after the first bike-sharing firm began operations in Hong Kong, several new players have entered the market, igniting a fierce competition in the city. In the meantime, complaints about company practices and improper handling of the rented bikes are on the rise, raising questions about whether Hong Kong should follow the mainland’s practice in regulating the industry.

To discuss these and related issues, the Hong Kong Economic Journal recently sought the views of Simon Lee, the convenor of Sharing Economy Alliance, an organization that aims to facilitate dialogue between parties involved in the sharing economy and the government.

Here are excerpts from that interview:

HKEJ: New bike-sharing service providers have been flocking to Hong Kong. How would you describe the market?

A: The Hong Kong bike-sharing market is growing at a fast pace. To date, there are six bike-share firms in the city. They have a common business model: put the bikes in as many places as possible in order to squeeze the other guys out. We have around 30,000 bikes in the city, six times the number in San Francisco, based on my estimation.

We have seen some of the streets are densely packed with bikes, and one member of our Alliance once suggested having some kind of negotiation and coordination among the operators on parking locations, which I rejected, as this practice could violate the Competition Ordinance implemented since 2015.

Instead, the government is able to set up specific parking sites for bike-sharing service, or even establish a licensing system for the industry. However, it will be a blow to the bike-sharing business model, which relies on bikers to ride the bike to other areas to facilitate the flow of bikes around the city.

Q: Bike-sharing, as a new business, seems to have been flooded with negative news coverage. Why?

A: Media is in general obsessed with the negative news. Recently, some share-bikes are found in a remote village on Lantau Island. And the village representative ordered the bikes cleared, without noticing that those bikes were dropped by bikers riding from Tung Chung. Instead of taking a subjective view, I believe it should be left to society to decide what the right practice is for bike-sharing operators.

Q: The bike-sharing system is seen as an effective solution to the last mile problem for commuters. There are governments, such as in San Francisco, that adopt a licensing system to select who can operate in the area. Do you think Hong Kong should follow suit?

A: There are two types of business models for bike-sharing firms, fixed-dock or dockless bike shares. Fixed-dock bike-sharing service is prevalent in Taiwan, which requires the bikers to return the bike to specific docks, normally located near bus stops and metro station exits, where they can lock up the bikes. For the dockless mode, which we have in Hong Kong, bikers can take the self-locking bike and park it anywhere.

The licensing system adopted in San Francisco aims to give the government control over dockless bike-sharing services. If we apply the licensing system to fixed-dock bike-sharing service, a problem of location allocation will have to be resolved.

To elaborate, if the government assigns each bike-sharing operator to a specific area, it would seem that the operator has entirely monopolized the bike lane in that area, just like the existing franchised green minibus operators.

Further regulation will result in more problems. Say we have issued six licenses for the existing operators, what should the government do if a new player arrives? Bike lane space, or road space, are scarce resources, just like radio waves. If the government renews the license every 15 years, the bike-sharing industry in Hong Kong will tend to become rigid during the period. Is it good for the market?

In my opinion, prior to adopting the licensing system, the government should let the sector to self-regulate properly.

Q: Cities are varied in terms of space, environment, and culture. Do you think bike-sharing service works for Hong Kong?

A: Bike-sharing works well in spacious cities, not so in densely-populated urban areas. In Tokyo and Singapore, underground bike garages with parking space are built; yet this solution is hardly possible in Hong Kong given so many cables and wires laying underground.

As another showcase of the uniqueness of the Hong Kong market, we can see that not many bike-sharing operators expand their service to Hong Kong Island due to its limited road capacity.

I believe it will take 20 years to make share bikes a part of the regular commute for residents in the city, not until we have sufficient parking space around the commercial buildings and offices. Also, the bike-sharing service now still leaves much to be desired, such as its mobile app experience, GPS-equipped monitoring, and smart lock system.

Q: Do you think the operators have the willingness and capability to address the issues themselves?

A: For me, I would ask the public to be more patient, and to give the sector some time. In the foreseeable future, I believe there will be a consolidation in the bike-sharing market, kicking out inefficient players, which will make the industry learn and move faster to improve.

As to bike littering, we have seen the operators are making every effort to solve the problem. Some of them have provided customer hotlines to handle the complaints and clear the bikes as soon as possible. They are also looking to approach it via big data analytics, identifying locations to avoid clogging the streets.